MODULE - IV

SALIENT FEATURES OF THE CONSUMER

PROTECTION ACT 1986

OBJECTIVES :

1. Better Protection of Interests of Consumers

2. Provide for Establishment of :
a) Consumer Council and
b) Other Authorities for settlement of Consumers Disputes
3. Matters connected therewith

APPLICATION :

- Applies to whole of India except Jammu and Kashmir

- Goods and Services

ENFORCEMENT :

- 15/4/1987

IMPORTANT DEFINITIONS: ( Sec. 2)

2(a) : ‘APPROPRIATE LABORATORY’ means a Laboratory or

Organisation
i) Recognized by Central Government
ii)Recognized by State Government subject to guidelines of Central
Government
iii)Any Laboratory or Organisation supported by Central or State
Government capable of testing whether goods suffer from defect
2(b): ‘ COMPLAINANT’ means :
i) Consumer or
ii) Registered Voluntary Consumer Association
iii) Central or State Government
iv) One or more Consumers where there are numerous consumers
having same interest
v) Death – Legal Heir , Legal Representative or Person making
complaint

2(c) ‘COMPLAINT’ means allegation in writing made by Complainant that:

i) An unfair trade practice or a restrictive trade practice has been
adopted by any trader or service provider
ii) The goods bought by him or agreed to be bought by him
suffer from one or more defects
iii) The services hired or availed of or agreed to be hired or
availed of by him suffer from deficiency in any respect
iv) A trader or the service provider, as the case may be has
charged for the goods or for the services mentioned in the
complaint a price in excess of the price –
a) Fixed by or under any law for the time being in force
b) Displayed on the goods or any package containing such goods
c) Displayed on the price list exhibited by him or under any law
for the time being in force
d) Agreed between parties
v) Goods which will be hazardous to life and safety when used
are being offered for sale to the public
a) In contravention of any standards relating to safety of such
goods as required to be complied with, by or under any law
for the time being in force
b) If the trader could have known with due diligence that the
goods so offered are unsafe to the Public
vi) Services which are hazardous or likely to be hazardous to life and
safety of the public when used are being offered by the service
provider which such person could have known with due
deligence to be injurious to life and safety
with a view to obtaining any relief provided by or under this Act
2(d) ‘CONSUMER’ means any person who –
i) Buys any goods for a consideration which has been paid or promised
or partly paid and partly promised, or under any system of deferred
payment and includes any user of such goods other than the person
who buys such goods for consideration paid or promised or partly
promised or partly paid or partly promised, or under any system of
deferred payment when such use is made with the approval of such
person but does not include a person who obtains such goods for
resale or for any commercial purpose ; OR

ii) Hires or avails of any services for a consideration which has been
paid or partly paid and partly promised, or under any system of
deferred payment and includes any beneficiary or such services
other than the person who hires or avails of the services for
consideration paid or promised, or under any system of deferred
payment, when such services are availed of with the approval of
the first mentioned person but does not include a person who
avails of such services for any commercial purpose
Explanation : For the purpose of this clause ‘Commercial purpose’
does not include use by a person of goods bought and
used by him and services availed by him exclusively
for the purposes of earning his livelihood by means of
self employment

2(e) ‘CONSUMER DISPUTE’ means a dispute where the person against

whom a complaint has been made, denies or disputes the allegations
contained in the complaint

2 (f) ‘DEFECT’ means any fault imperfection, short coming or

inadequacy in the quality, nature and manner of performance which is
required to be maintained by or under any law for the time being in
force or has been undertaken to be performed by a person in pursuance
of a contract or other wise in relation to any service.

2(i) ‘GOODS’ means goods as defined in the Sale of Goods Act, 1930 that
is means every kind of movable property other than actionable claims
and money and includes stocks, shares, growing crops, grass and things
attached to or forming part of the land which are agreed to be severed
before sale or under the contract of sale
2(j) ‘MANUFACTURER’ means a person who-
i) makes or manufactures any goods or part thereof
ii) Does not make or manufacture any goods but assembles apart
thereof made or manufactured by others
iii) Puts or causes to be put his own mark on any goods made or
manufactured by any other manufacturer

2(m) ‘PERSON ‘ Includes –

a) A firm whether registered or not
b) A Hindu Undivided Family ( HUF)
c) A Co-operative Society
d) Every other association of persons whether registered under
Societies Registration Act, 1868

2( nnn) ‘RESTRICTIVE TRADE PRACTICE’ means a trade practice which

tends to bring about manipul;ation of price or its conditions of
delivery or
to affect flow of supplies in the market relating to goods or services
in such a manner as to impose on the consumers unjustified cost or
restrictions and shall include –
a) Delay beyond the period agreed to by a trader in supply of such
goods or in providing the services which has led or is likely to lead
to rise in the price
b) Any trade practice which requires a consumer to buy, hire or avail of
any goods or, as the case may be, services as condition precedent to
buying, hiring or availing of other goods or services.

2(o) ‘SERVICE’ means service of any description which is made available

to potential users and includes, but not limited to, the provision of facilities
in connection with BANKING, FINANCING, INSURANCE,
TRANSPORT, PROCESSIG, SUPPLY OF ELECTRICAL or OTHER
ENERGY, BOARD or LODGING or BOTH, HOUSING
CONSTRUCTION, ENTERTAINMENT, AMUSEMENT or THE
PURVEYING OF NEWS or OTHER INFORMATION, but does not
include the rendering of any services free of charge or under a contract of
personal service
Sec. 2 (oo) ‘SPURIOUS GOODS AND SERVICES’ means such Goods and
services which are claimed to be genuine but they are actually not so

Sec.2 (q) ‘TRADER’ in relation to any goods means a person who sells or
distributes any goods for sale and includes the manufacturers thereof and
where such goods are sold or distributed in package form, includes the
packer thereof.

Sec.2 (r) ‘UNFAIR TRADE PRACTICE’ means a trade practice which, for
the purpose or promoting the sale, use or supply of any goods or for the
provisions of any service adopts any unfair method or deceptive practice
including any of the following practices namely –
1) The practice of making any STATEMENT whether orally or in writing
or by visible representation which
i) Falsely represents that the goods are of a particular standard,
quality, quantity, grade composition, style or model
ii) Falsely represents that the services are of a particular standard,
quality or Grade
iii) Falsely represents any re- built, second hand, renovated,
reconditioned or old goods as new goods
iv) Represents that the goods or services have sponsorship, approval,
performance, characteristics, accessories, uses of benefits which
such goods or services does not have
v) Represents that the seller or the supplier has a sponsorship,
approval or affiliation which the seller or supplier does not have
vi) Makes a false or misleading representation concerning the need
for, or the usefulness of any goods and services
vii) Gives to the public any warranty or guarantee of the
performance, efficacy or length of life of a product or of any
goods that is not based on an adequate or proper test thereof.
- Defence of adequate test – burden of proof on such person
viii) Makes to the public a representation in a form that purports to be:
a) A warranty or Guarantee of a product or of any goods or
services or
b) To promise to replace, maintain or repair an article or any part
thereof or to repeat or continue a service until it has achieved a
specified result
with no reasonable prospect of carrying it out
 ix) Materially misleads the public concerning the price at which a
product or like product or goods or service have been or are
ordinairy sold or provided
x) Gives false or misleading fact disparaging the goods, services or
trade of another person
Explanation : For the purposes of clause (1) a statement that is –
a) Expressed on an article offered or displayed for sale or on its
wrapper or container
b) Expressed on any thing attatched to, inserted in, or accompanying an
article offered or displayed for sale, or on anything on which the
article is mounted for display or sale or
c) Contained in or on anything that is sold, sent, delivered, transmitted,
or in any other manner whatsoever made available to a member of
public shall be deemed to be a statement made to the public by and
only by the person who had caused the statement to be expressed
made or contained

2) Permits the publication of any advertisement whether in any newspaper

or otherwise, for the sale or supply at a BARGAIN PRICE of goods or
services that are not intended to be offered for sale or supply at the
Bargain price, or for a period that is and in quantities that are reasonable
having regard to the nature of the market in which the business is
carried out, the nature and size of business and the nature of the
advertisement
Explanation: ‘BARGAINING PRICE’ means -
a) A price that is stated in any advertisement to be a bargain price by
reference to an Ordinary price or otherwise or
b) A price that a person who reads, hears, or sees the advertisement,
would reasonably understand to be a bargain price having ‘regard to
the prices at which the product advertised or like products are
ordinarily sold.

3) PERMITS :-
a) The offering of GIFTS, PRIZES or other ITEMS with the intention
of not providing them as offered or creating impression that
something is being given or offered free of charge when it is fully or
partly covered by the amount charged in the transaction as a whole
 b) The conduct of any CONTEST, LOTTERY, GAME OF CHANCE
or SKILL, for the purpose of promoting, directly or indirectly, the
sale, use or supply of any product or any business interest

3A WITHHOLDING from the participants of any scheme offering

GIFTS, Prizes or other items free of charge, on its closure the
INFORMATION ABOUT FINAL RESULTS of the scheme
Explanation : For the purpose of this sub-clause, the participants of a
scheme shall be deemed to have been informed of the final results of
the scheme where such results are within a reasonable time
published prominently in the same newspapers in which the scheme
was originally advertised.

4) Permits the sale or supply of goods intended to be used, or are of a

kind likely to be used by that the goods DO NOT COMPLY WITH
THE STANDARDS PRESCRIBED by competent authority relating
to performance, composition, contents, design, constructions,
finishing or packaging as are necessary to prevent or reduce the risk
of injury to the person using the goods

5) Permits the HOARDING or DESTRUCTION of goods, or refuses to

sell the goods or to make them available for sale or provide any
service, if such hoarding or destruction or refusal raises or tends to
RAISE or is intended to raise the COST of those or other similar
GOODS or SERVICES.

6) MANUFACTURE OF SPURIOUS GOODS or offering such goods

for sale or adopting DECEPTIVE PRACTICES IN THE
PROVISION OF SERVICES